In some instances, when consumers shop at a merchant, they pay using a personal check. Checks are issued to a consumer with an associated financial account, such as a checking account. At a point-of-sale, check verification services may use American Bankers Association (ABA) number, Bank Identifier Code (BIC), or other bank code routing. The ABA number, often referred to as the “transit routing number,” is the nine-digit electronic address of a financial institution of the account. The BIC is a unique address that identifies financial institutions involved in international financial transactions and consists of eight or eleven characters comprising the first three or all four of the following components: Bank Code, Country Code, Location Code and Branch Code. BICs are allocated and managed by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). The ABA number or BIC is encoded in the Magnetic Ink Character Recognition (MICR) line of all checks, and is assigned to each financial institution and each branch office of that financial institution. The associated checking account number is also encoded in the MICR line. The merchant scans the check and transmits MICR data to process transaction messages. When a check is cleared and settled, the check amount is directly deducted from the checking account identified from the checking account number and transit routing number. Therefore, the consumer must have sufficient funds in the checking account in order for the consumer's check to be cashed by a merchant and successfully clear and settle. However, consumers may still write checks to merchants when there are insufficient funds in the checking account, causing fees and lack of payment when a merchant tries to cash the check and the check does not clear. Checks are also vulnerable to fraud, as the merchant can only verify the consumer's identity, and cannot in real-time verify the check or checking account. While banks can electronically transmit the check data, the majority of check verification is accomplished in batch and may be significantly delayed.
Because check fund verification does not occur in real time, a merchant takes significant risk in accepting personal checks, and may not accept payment in the form of a personal check. From the merchant's perspective, check payments are slow as they take a longer time to clear and settle, therefore taking a long time to determine if there are sufficient funds in the checking account, or if the check is fraudulent. However, checks are still used by many consumers to pay for goods and services. It would be desirable to allow consumers that still use checks to use them, but to also allow them to be accepted at more places with added security for the merchant.
Another problem with checks (and other type of value tokens) is that they may have limited use in the payment card infrastructure. The payment card infrastructure is becoming more ubiquitous, and it would be desirable to better integrate checks and other value tokens with different payment card types.
Embodiments of the invention address these and other problems, individually and collectively.